Access to information

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The Ontario Securities Commission, like several other regulatory investigators, has extensive power to compel testimony and require the disclosure of documents and information.  A recent decision of the OSC, B (Re) (2020 ONSEC 21), has highlighted a gap in the Commission’s power to compel testimony from a witness where such testimony may constitute a breach of the witness’s contractual obligations to a third party.

The Case

Staff of the Commission is conducting an investigation pursuant to an investigation order issued by the OSC under section 11 of the Securities Act.  Investigation orders empower Staff to issue a summons pursuant to section 13 of the Act, to compel an individual to provide oral testimony under oath and to provide documentary evidence.  Section 16 of the Act prohibits the recipient of a summons from disclosing information relating to the summons or the investigation, subject to narrow exceptions.

Staff served upon an individual, identified only as “B”, a summons under section 13 of the Act.  Although B was prepared to cooperate with Staff, B was concerned that doing so would violate B’s employment contract, which imposes confidentiality over all matters relating to B’s employment without an exception that is relevant to a regulatory investigation.
Continue Reading Recent OSC Decision Raises Uncertainty for Witnesses Responding to a Summons

If the Hillary Clinton email scandal wasn’t a clear enough lesson that one should not conduct “official” work using personal electronic communication tools (be it personal email, texts or other methods), a number of recent court decisions have required executives to produce communications from their personal accounts and devices. Executives and advisors should not assume that communications using methods other than corporate email will somehow be protected or otherwise not find the light of day in the event of a dispute or investigation.Continue Reading Think Before You Send: The Legal Risks of Emails and Text Messages from Personal Accounts

Part 3: Reform To Canadian Access to Information

Co-authored by Gianrico DePasquale and Roseanna Dat.

In Part 1, we discussed access to information requests in Canada and in Part 2, we discussed freedom of information requests in the United States.

As a follow up to Part 1, we report that the Government of Canada is in the process of amending the Access to Information Act[1] and is considering potential reform which may have an impact on businesses.  In its Review of the Access to Information Act, the Standing Committee on Access to Information, Privacy and Ethics recommended, among other things, that the Act should apply to institutions that are publicly funded by the Government of Canada.[2] There are three potential options suggested to determine whether an institution would be subject to the Act under the proposed reform.

Proposed Reform

The Information Commissioner of Canada (Commissioner) has proposed the following three options to determine whether an institution that is funded by the Government of Canada should be subject to the Act under the proposed reform:

  • if the institution receives a loan, grant or contribution of $5 million or more;
  • if the source of 50% of the institution’s funding originates (directly or indirectly) from the Government of Canada, and
  • if the institution’s income from the federal government reaches a certain percentage or an absolute threshold higher than $5 million of public funding.

According to the Commissioner, the criteria in option A is proposed to include expenditures, grants and contributions equal to or in excess of $5 million which are voted on by Parliament as separate line items in the Federal budget.[3] The criteria in option B is proposed as it is the method used in both Denmark and Serbia. The criteria in option C is proposed as it is a middle ground or saving grace between options A and B.[4]Continue Reading Government Access to Information – Part 3

Part 2: US Government – Freedom of Information

Co-authored by Gianrico DePasquale and Roseanna Dat.

In Part 1, we discussed access to information requests in Canada.

In the United States, businesses that interact with the federal agencies as defined in the Freedom of Information Act[1] may be similarly subject to a freedom of information (FOIA) request. A FOIA request compels the federal agency to disclose records in its possession should any person make a formal request. As such, a FOIA request may be used in the United States to gain information about competitors.

Legislative Overview

The goal of the Act is to encourage accountability through transparency. Under the Act, any person, regardless of citizenship or residency, has the right to request access to federal agency records. The Act defines “agency” as any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government (including the Executive Office of the President), or any independent regulatory agency. The Act defines “records” as any information that would be an agency record maintained by an agency in any format, including an electronic format; and any information maintained for an agency by an entity under Government contract, for the purposes of records management. Any record that a federal agency creates or receives in relation to a business may be subject to a FOIA request, regardless of whether the records contain sensitive, confidential, or proprietary information.

Each state has its own FOIA legislation that applies to state agencies. State agency obligations and exemptions can vary and may be more onerous than the federal Act, as such, different considerations and safeguards may apply.

Protecting Information

FOIA applies to only records that are in the possession of federal agencies, not information. Therefore, images viewed, but not copied or downloaded, are not subject to FOIA disclosure (emails are considered records subject to FOIA disclosure). An information sharing systems that does not allow for copying or downloading of information, may be used to protect information, however, any notes related thereto may be subject to disclosure.Continue Reading Government Access to Information – Part 2

Part 1: Canadian Government – Access to Information

Co-authored by Gianrico DePasquale and Roseanna Dat.

This is the first part of our series reporting on the potential for companies to seek access to information about business competitors held by governments in Canada and the United States.

In Canada, businesses that interact with Government Institutions as defined in the Access to Information Act[1] may be subject to an access to information (ATIA) request. An ATIA request requires Government Institutions to disclose the records submitted to or created by the Government Institutions, even if held only temporarily. As such, an ATIA request may be used in Canada to gain information about competitors.

Legislative Overview

Pursuant to the Act, any person who is a Canadian citizen or a permanent resident of Canada has a right to, and shall, on request, be given access to any record under the control of a Government Institution. The Act defines “Government Institution” as any department or ministry of the Government of Canada or any parent Crown corporation or its wholly owned subsidiaries, as listed in Schedule 1 to the Act. The Act defines “records” as any documentary material, regardless of the medium or form.  The term record captures any machine readable record (such as email and text messages) and any physical medium that can be written or etched upon.

Each province has its own ATIA legislation that applies to provincial institutions. Provincial institution obligations and exemptions can vary and may be more onerous than the federal Act; as such, different considerations and safeguards may apply.

Protecting Information

The Act applies to only records that are in the possession of Government Institutions, not information. Therefore, images viewed, but not copied or downloaded are not subject to ATIA disclosure (as noted above, emails are considered records subject to ATIA disclosure). An information sharing system that does not allow for copying or downloading of information, may be used to protect information, however, any notes related thereto may be subject to disclosure.Continue Reading Government Access to Information – Part 1